The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“HIGHER EDUCATION ACT OF 1965 AMENDMENTS” mentioning the Federal Reserve System was published in the Senate section on pages S13310-S13311 on Dec. 14, 2001.
The publication is reproduced in full below:
HIGHER EDUCATION ACT OF 1965 AMENDMENTS
Mr. DASCHLE. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 277, S. 1762.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (S. 1762) to amend the Higher Education Act of 1965 to establish fixed interest rates for student and parent borrowers, to extend current law with respect to special allowances for lenders, and for other purposes.
There being no objection, the Senate proceeded to consider the bill.
Mr. DASCHLE. Mr. President, I ask unanimous consent that the bill be read a third time and passed, the motion to reconsider be laid upon the table, and that any statements related thereto be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill (S. 1762) was read the third time and passed as follows:
S. 1762
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. INTEREST RATE PROVISIONS.
(a) FFEL Fixed Interest Rates.--
(1) Amendment.--Section 427A of the Higher Education Act of 1965 (20 U.S.C. 1077a) is amended--
(A) by redesignating subsections (l) and (m) as subsections
(m) and (n), respectively; and
(B) by inserting after subsection (k) the following new subsection:
``(l) Interest Rates for New Loans on or After July 1, 2006.--
``(1) In general.--Notwithstanding subsection (h), with respect to any loan made, insured, or guaranteed under this part (other than a loan made pursuant to section 428B or 428C) for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall be 6.8 percent on the unpaid principal balance of the loan.
``(2) PLUS loans.--Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall be 7.9 percent on the unpaid principal balance of the loan.
``(3) Consolidation loans.--With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after July 1, 2006, the applicable rate of interest shall be at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of--
``(A) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of 1 percent; or
``(B) 8.25 percent.''.
(2) Conforming amendment.--Section 428C(c)(1)(A) of such Act (20 U.S.C. 1078-3(c)(1)(A)) is amended to read as follows:
``(1) Interest rate.--(A) Notwithstanding subparagraphs (B) and (C), with respect to any loan made under this section for which the application is received by an eligible lender--
``(i) on or after October 1, 1998, and before July 1, 2006, the applicable interest rate shall be determined under section 427A(k)(4); or
``(ii) on or after July 1, 2006, the applicable interest rate shall be determined under section 427A(l)(3).''.
(b) Direct Loans Fixed Interest Rates.--
(1) Technical correction.--Paragraph (6) of section 455(b) of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)), as redesignated by section 8301(c)(1) of the Transportation Equity Act for the 21st Century (Public Law 105-178; 112 Stat. 498) is redesignated as paragraph (9) and is transferred to follow paragraph (7) of section 455(b) of the Higher Education Act of 1965.
(2) Amendments.--Section 455(b) of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)) is amended--
(A) by redesignating paragraph (7) as paragraph (8); and
(B) by inserting after paragraph (6) the following new paragraph:
``(7) Interest rate provision for new loans on or after july 1, 2006.--
``(A) Rates for fdsl and fdusl.--Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall be 6.8 percent on the unpaid principal balance of the loan.
``(B) PLUS loans.--Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct PLUS loan for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall be 7.9 percent on the unpaid principal balance of the loan.
``(C) Consolidation loans.--Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which the application is received on or after July 1, 2006, shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of--
``(i) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent; or
``(ii) 8.25 percent.''.
(c) Extension of Current Interest Rate Provisions for Three Years.--Sections 427A(k) and 455(b)(6) of the Higher Education Act of 1965 (20 U.S.C. 1077a(k), 1087e(b)(6)) are each amended--
(1) by striking ``2003'' in the heading and inserting
``2006''; and
(2) by striking ``July 1, 2003,'' each place it appears and inserting ``July 1, 2006,''.
SEC. 2. EXTENSION OF SPECIAL ALLOWANCE PROVISION.
Section 438(b)(2)(I) of the Higher Education Act of 1965
(20 U.S.C. 1087-1(b)(2)(I)) is amended--
(1) by striking ``, and before july 1, 2003'' in the heading;
(2) by striking ``and before July 1, 2003,'' each place it appears, other than in clauses (ii) and (v);
(3) by striking clause (ii) and inserting the following:
``(ii) In school and grace period.--In the case of any loan--
``(I) for which the first disbursement is made on or after January 1, 2000, and before July 1, 2006, and for which the applicable rate of interest is described in section 427A(k)(2); or
``(II) for which the first disbursement is made on or after July 1, 2006, and for which the applicable rate of interest is described in section 427A(l)(1), but only with respect to
(aa) periods prior to the beginning of the repayment period of the loan; or (bb) during the periods in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 427(a)(2)(C) or 428(b)(1)(M);
clause (i)(III) of this subparagraph shall be applied by substituting `1.74 percent' for `2.34 percent'.'';
(4) in clause (iii), by inserting ``or (l)(2)'' after
``427A(k)(3)'';
(5) in clause (iv), by inserting ``or (l)(3)'' after
``427A(k)(4)'';
(6) in clause (v)--
(A) in the heading, by inserting ``before july 1, 2006'' after ``plus loans''; and
(B) by striking ``July 1, 2003,'' and inserting ``July 1, 2006,'';
(7) in clause (vi)--
(A) by inserting ``or (l)(3)'' after ``427A(k)(4)'' the first place it appears; and
(B) by inserting ``or (l)(3), whichever is applicable'' after ``427A(k)(4)'' the second place it appears; and
(8) by adding at the end the following new clause:
``(vii) Limitation on special allowances for plus loans on or after july 1, 2006.--In the case of PLUS loans made under section 428B and first disbursed on or after July 1, 2006, for which the interest rate is determined under section 427A(l)(2), a special allowance shall not be paid for such loan during any 12-month period beginning on July 1 and ending on June 30 unless--
``(I) the average of the bond equivalent rates of the quotes of the 3-month commercial paper (financial), as published by the Board of Governors of the Federal Reserve System in Publication H-15 (or its successor), for the last calendar week ending on or before such July 1; plus
``(II) 2.64 percent,
exceeds 9.0 percent.''.
Mr. JOHNSON. Mr. President, today the Senate passed S. 1762, a bill I introduced to improve the formula for student loan interest rates and to ensure the long-term viability of the student loan program. I am pleased the Senate unanimously agreed to this important legislation and I am proud to have worked with both students and lenders and my colleagues on the Health, Education, Labor, and Pensions Committee, especially Chairman Kennedy and Ranking Member Gregg, as well as Majority Leader Daschle, in passing this monumental legislation.
All across America, millions of young people are preparing to apply to college. These teenagers are dreaming not only of the college experience they are about to embark upon, but also of graduating to become teachers, doctors, engineers, and even public servants. Thanks to the national education loan program, the educational and career aspirations of students and their families can become reality.
We know that the future of our Nation lies in educating the next generation of young people so that each of them can realize the promise of America. For 35 years, we have invested in our future by opening the doors of colleges and universities to the broadest cross-section of our citizens at the lowest possible cost. That is why passing this legislation was crucial to ensure that education loans are available to help future generations of students, workers, and their families climb the ladder of economic opportunity.
Since 1965, a partnership of students, workers, their families, educational institutions, lenders, and the Federal Government has opened the doors of educational opportunity for more than 50 million Americans. By any measure, the education loan program is a winning investment for our Nation.
Education loans are good investments in our economy and in our citizens. As I travel across South Dakota, educators, employers, and students tell me how valuable a college degree is in today's economy. Indeed, we know that graduates with college degrees earn an average of 80 percent more than individuals with only a high school diploma. Over a lifetime, the earnings difference between individuals with high school and college degrees can be more than $1 million. At a time when many workers are losing their jobs through no fault of their own, education loans are critical tools that can empower these workers to upgrade their skills. As we search for ways to expand our economic prosperity, we must preserve this important investment in the future of our Nation.
Congress has now taken the initiative to ensure that future generations have access to the college or university of their choice by enacting a permanent solution to the interest rate issue. Again, I thank my colleagues on both sides of the aisle for their support in passing this critically important legislation of which we can all be proud.
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